The outcome of the UK’s general election carries significant implications for all sectors of the economy, especially small businesses. In this blog, we will explore the key aspects of the election results with Labour’s win, and how they might impact small business owners across the country.
Overview of the Election Results
Labour has set the stage for a busy legislative programme, as highlighted in the King’s Speech. The 2024 King’s Speech was held on 17 July 2024 and opened the first session of the new parliament since the general election.
With a focus on delivering their manifesto promises, Labour aims to introduce key bills such as the Skills England Bill and the Employment Rights Bill, which will impact businesses and workers alike. The government’s commitment to driving forward its legislative agenda signals a period of significant changes in various sectors.
Policy Changes and Economic Impact:
Labour’s proposed policies include measures to support small businesses, such as making it easier to access funding and investment. Changes to schemes like the Enterprise Investment Scheme and Seed Enterprise Investment Scheme aim to enhance support for early-stage businesses. The creation of a ‘Scale-Up Taskforce’ underscores Labour’s dedication to addressing barriers to business growth, potentially reshaping the economic environment for small enterprises.
Impact on Small Business Funding:
The election results could lead to shifts in small business financing, with Labour emphasising support for startup growth. Plans to empower the British Business Bank to invest in small businesses outside of London and improve existing funding schemes suggest a more conducive funding landscape. The proposed ‘Scale-Up Taskforce’ further demonstrates a proactive approach to fostering business growth and innovation.
As the new government under Labour takes charge, small business owners should stay informed about evolving policies and funding opportunities to stay up-to-date with the changing business landscape effectively.
Taxation and Financial Implications
Labour’s stance on tax changes is clear – no increases for working people. They plan to cap corporation tax at 25%, aiming to boost small business growth. Labour intends to modernise HMRC to combat tax avoidance and close the tax gap. Late payments will also be tackled with tougher laws, making big businesses more accountable for their payment practices.
Scrapping the business rates system is another highlight, with Labour proposing a new system to support high streets and incentivise small business investment.
Employment and Labor Market Effects
Labour’s focus on improving workers’ rights includes plans to ban zero-hour contracts and introduce a ‘genuine’ living wage. These changes aim to enhance employee satisfaction and productivity, benefitting small businesses. The National Living Wage will be extended to all adult workers, potentially increasing costs for employers.
Public contracts will become more accessible for small businesses, with a National Procurement Plan allocating funds specifically for SMEs.
Trade and International Business
Labour aims to support small business exports by improving trade policies and working with the EU to streamline importing and exporting processes. A small business export task force will be established to provide guidance and simplify procedures for businesses.
Innovation and Technology
Labour’s infrastructure development plans include achieving nationwide gigabit broadband and 5G coverage by 2030. They also intend to address the skills shortage by replacing the Apprenticeship Levy and rejuvenating the construction sector by building new homes and reducing red tape in planning.
Regional Impacts
Labour’s policies include empowering regional leaders and establishing local employment systems to benefit small businesses. More stable R&D tax credits and a Regulatory Innovation Office aim to support technology and innovation sectors. This could provide funding opportunities for small businesses.
Conclusion
Labour’s policies cover a wide range of areas impacting small businesses, from taxation and employment rights to trade and innovation. The party plans aim to create a fairer business environment, support growth, and provide opportunities for small businesses to thrive in various sectors.
How CloudAccountant.co.uk Can Help You as a Small Business
If you have any questions about how the new election might affect your finances as a business owner or sole trader or would like to know more about how we can customise an accountancy solution to your needs, you can contact us by emailing
info@cloudaccountantsoldsite.kinsta.cloud, call us on 01625 546 232, or simply fill in the enquiry form here.